Guide · 6 min read

NBA cap-and-trade glossary

Every NBA trade tweet uses about eight acronyms that no broadcast ever defines. Here they are, in plain English, in one place.

Apron (first)

Salary threshold about $7M above the tax line. Teams over it lose the non-taxpayer MLE, cannot acquire via sign-and-trade, and cannot take back more salary than they send.

Apron (second)

A harder salary threshold about $18M above the tax line. Teams over it cannot aggregate contracts in a trade, cannot send out cash, cannot use the taxpayer MLE, and have their pick seven years out frozen.

Arenas Provision (Gilbert Arenas Provision)

Rule that caps the first-year salary of an offer sheet to a restricted free agent with 1 or 2 years of experience at the non-taxpayer MLE, letting his original team match without breaking the bank.

Bird Rights

The ability of a team to exceed the salary cap to re-sign its own player who has been under contract with them for three consecutive years without changing teams as a free agent.

Base Year Compensation (BYC)

For a player who signs a new deal with his own team via Bird or Early Bird rights with a raise over 20%, his outgoing trade salary in year one is the greater of half his new salary or his prior salary. Effectively makes them untradeable for equal money for a year.

Cap hold

A placeholder amount that counts against the cap for a free agent still owned by the team, so it can't renounce him just to gain cap space and then re-sign him at full Bird value.

Designated Rookie extension

A rookie-scale extension that can start at 30% of the cap (instead of 25%) if the player meets specific All-NBA or MVP/DPOY criteria.

Designated Veteran extension (Supermax)

Extension available to 7–9 year veterans re-signing with their own team, worth up to 35% of the cap. Limited to two designated veterans per team; a designated veteran acquired via trade forfeits the eligibility.

Early Bird Rights

A weaker version of Bird rights available after two consecutive seasons with the team; allows re-signing above the cap up to 175% of the previous salary or the average salary.

Hard cap

A firm salary ceiling a team cannot exceed for the rest of the season. Triggered by using the non-taxpayer MLE (first apron), acquiring via sign-and-trade (first apron), or using the bi-annual exception (first apron). Second-apron teams are effectively hard-capped at the second apron.

MLE (Mid-Level Exception)

An exception letting a team over the cap sign a free agent for a set amount. Non-taxpayer MLE (~$12M), taxpayer MLE (~$5M), and room MLE (~$8M for teams that used cap space).

Non-Bird Rights

The weakest re-signing exception — allows a team to re-sign a player above the cap up to 120% of his previous salary. Available after one season with the team.

Poison Pill provision

For a rookie-scale player who signed an extension, his outgoing trade salary is the average of the current year and the extension years, while the incoming team gets him at the current-year salary. Effectively freezes extended rookies from trades for the rest of the season.

Qualifying Offer (QO)

A one-year contract a team can extend to a player at the end of his rookie-scale deal to make him a restricted free agent.

Restricted Free Agent (RFA)

A free agent whose original team has the right to match any offer sheet he signs elsewhere.

Room Exception

A ~$8M exception for teams that used cap space, letting them sign one free agent above the reset cap.

Seven-pick rule

First-round picks can only be traded up to seven drafts into the future.

Sign-and-trade

A team signs its own free agent and immediately trades him. Triggers a first-apron hard cap on the receiving team for the rest of the season.

Stepien Rule

A team cannot be without a first-round pick in two consecutive future drafts. Named after former Cavaliers owner Ted Stepien.

TPE (Traded Player Exception)

When a team trades a player and takes back less salary, it can receive the difference as an exception, usable for up to one year to absorb salary in a later trade.

Two-way contract

A hybrid NBA / G-League contract for young players; two-way players do not count against the salary cap and are capped at 50 NBA games per season.

VORP (Value Over Replacement Player)

An estimate of the points per 100 possessions a player contributes above a replacement-level player, scaled by minutes played. Common input to trade grades.

Waive and stretch

Cutting a player and spreading his remaining guaranteed salary across (2 × remaining years + 1) seasons. Common way to escape a bad long-term deal at the cost of dead money later.